Competition or smartphones? Factors promote mobile broadband adoption in OECD countries

The adoption of broadband technology is a major policy issue for all countries. The objective of this paper is to identify factors contributing to mobile broadband (3G+4G mobile phones) adoption by focusing on smartphones. Broadband can broadly be divided into fixed (DSL, cable modem, FTTH) and mobile systems. This paper focuses on mobile broadband in six of the 34 OECD member countries-the US, the UK, France, Germany, Korea, and Japan-which represent more than 50% of the total population and mobile devices in use of OECD countries. Panel data analysis using data from 2000 to 2012 identified the introduction of smartphones, market competitiveness in terms of HHI, and FTTH adoption as factors contributing to mobile broadband adoption. The findings regarding HHI are particularly relevant to the much-contested issue of "carrier consolidation" and indicate that consolidation may have a detrimental effect on mobile broadband adoption, and, therefore should not be approved by regulators.